London aluminum prices on Wednesday held close a 13-1/2-year high hit in the previous session, supported by supply shortage concerns, even though the dollar ticked up and made the greenback-priced metal costlier for holders of other currencies.
Three-month aluminum on the London Metal Exchange was flat at $3,183 a ton, as of 0735 GMT.
On Tuesday, prices had touched their highest since July 2008 at $3,236.
The most-traded March aluminum contract on the Shanghai Futures Exchange closed up 2.4 percent at 22,870 yuan ($3,594.22) a ton, having earlier hit a peak since Oct. 22.
“A high energy price environment, coupled with decarbonization policies, creates a challenging backdrop for aluminum supply growth,” Standard Chartered said in a note.
Earlier this week, Slovak aluminum smelter Slovalco said it had cut output to about 60 percent of capacity because of the high cost of power and emissions allowances and a lack of government compensation.
On Tuesday, Goldman Sachs raised its aluminum price forecasts with a new 12-month target of $4,000 per ton and said it sees prices averaging $3,450 in 2022.
Meanwhile, a rise in COVID-19 infections in major aluminum-producing Chinese city of Baise also stoked concerns of supply disruptions with curbs on transportation.
The dollar index rose 0.1 percent as investors awaited US inflation data due later this week for clues on the pace of Federal Reserve policy tightening.
